Wine and spirits distributors do not always get full credit for their myriad of services offered.
With portfolios bursting at the seams, their role in the 3-tier system is difficult. We at Andavi Solutions would like to recognize some of the critical functions distributors perform on behalf of their supplier partners.
1) Training and Education
Distributor sales teams include some of the most highly trained professionals in the industry.
The training opportunities distributors provide are not solely for internal stakeholders. They also play a critical role in the education and training of their supplier partners.
It is sad but true to say that many brand owners do not properly train their people, and by default, distributors end up picking up the slack.
Another vital area of training distributors provide is forecasting and inventory management (more on this below).
Distributors do a lot of staff training (far more than most suppliers), and they don’t always get due credit for these efforts. The tools exist, however, to bring perfect visibility to all of this activity!
As a side note: Legal issues are one of the most glaring gaps in education distributors provide to their supplier partners. Many suppliers do not know the laws of each state as well as they should. This often results in supplier representatives saying and doing things that violate the law.
2) Market Analysis and Insights
Distributors possess significant information about the markets they service, especially regarding what sells and what doesn’t.
They often find themselves needing to temper suppliers’ expectations around what kind of growth potential exists for each product category, price tier, and trade channel.
Suppliers everywhere would do well to listen to and heed this guidance to collaborate with their distributors more effectively.
Trends come and go, but rest assured, the distributor is typically the best and, sadly, most ignored resource for accurate market and category insights suppliers need to reach their sales goals.
3) B2B eCommerce and Online Supplier services
In the last five to six years, distributors have made significant leaps in their ability to manage “the long tail” of distribution more efficiently, and more and more, this requires a digital approach.
Here are just a few of the areas where distributors meet the demand for digital B2B services:
- Online ordering platformsallow customers (retailers, restaurants, and bars) to place orders online.
- eCommerce integrations: many wholesalers integrate their digital ordering platforms with their customers’ eCommerce systems and provide accurate product listings and pricing on their websites.
- Mobile apps: enable order replenishment, product availability, and notifications about promotions and new arrivals.
- Supplier portals: These portals enable access to sales data, monitor inventory levels, and collaborate on marketing initiatives and promotions.
- CRM and Customer Support: Many distributors use CRM systems to manage customer and supplier partner interactions. They are often willing to share the data from these tools if the Supplier has the means to ingest it.
- Compliance and Regulatory Tools: Distributors may provide tools to help customers and suppliers comply with various regulatory requirements such as labeling, tax reporting, and alcohol distribution laws.
- Digital Marketing Support: Distributors often assist supplier partners with digital marketing initiatives, including social media campaigns, email marketing, and online promotions to help boost product visibility and sales.
- Order Tracking and Delivery Notifications: To keep customers informed about the status of their orders and expected delivery times.
By offering these digital B2B services, wine and spirits wholesalers aim to enhance efficiency, improve customer satisfaction, and strengthen their relationships with customers and suppliers in the competitive beverage distribution industry.
4) Inventory Management
Distributors utilize sophisticated inventory management systems to manage stock levels. These systems can also provide insights into product trends and purchasing patterns.
A surprising number of supplier partners do not fully utilize their distributors’ capabilities in this area. Or worse, they ignore the distributors’ guidance on how to help them keep their inventory as low as possible while eliminating out-of-stock situations at their warehouses. Instead, supplier partners insist on large shipment volumes to make fiscal numbers and provide large deal incentives to do so, introducing drastic inefficiency and cost into the system.
Supplier partners should regularly schedule brief check-in meetings to review key data points such as days on hand, daily rate of sale, and recommended orders. The ideal cadence would be to hold these brief meetings monthly or, at a minimum, once per quarter.
5) Supporting Under-represented Brand Owners
Most distributors place a very high value on DEI internally and externally.
One of the ways this priority is manifested is in how distributors go out of their way to make room in their book for the diversity of owners (especially startup brands) looking to gain access to diverse audiences.
A shining example of this is the Republic National Distributing Company. RNDC actively seeks to support underrepresented brand owners and vigorously pursues and supports associations like Diverse Powered Brands.
In general, distributors seek to make a difference in supporting Black-owned, minority-owned, and women-owned producers looking to scale their brands.
6) Strategic Partnerships
Wine and spirits distributors often form strategic partnerships with various entities to aid supplier partners and improve distribution networks.
These strategic partnerships cover a wide array, including:
- State-level retailer and restaurant associations
- Trade groups
- Technology providers
- Marketing and promotion agencies
- Industry research groups
- Colleges and universities
These partnerships are essential for ensuring that wine and spirits wholesalers can effectively distribute their supplier partners’ products to a wide range of customers while staying competitive in a constantly evolving market.
7) Doing Good in Their Communities
Most distributors actively raise money for various local and national charities and directly donate to them.
For example, Empire Merchants in New York contributes products and monetary donations to more than eight charitable organizations, including hospitals, youth organizations, food banks, and LGBTQ foundations.
Another area of philanthropy that distributors engage in is providing various scholarship opportunities.
In 2023, RNDC raised over $1 million in support for the Prostate Cancer Foundation!
8) Multi-state Partnerships
Most suppliers are certainly aware of the coverage and reach of the largest national distributor companies. But, not all understand and appreciate the vast array of distributors that offer multi-state partnerships on a smaller scale.
The benefits to suppliers and brands of these multi-state wholesale companies are many, including:
- Market access
- Efficient distribution
- Expertise and resources
- Regulatory compliance
- Negotiating power
- Cost savings
- Scale and volume
- Portfolio synergy
- National and international expansion
- Financial stability
It’s important to note that while there are clear advantages to working with large, multi-state wholesale companies, there are also considerations such as contractual agreements, fees, and competition for attention within their portfolios.
Careful selection and management of distributor partnerships are crucial for maximizing the benefits and achieving your brand’s goals in the wine and spirits industry.
9) Championing Small, Emerging Brands
More and more distributors are looking for ways to support the smaller, emerging brands. They instinctively understand that today’s emerging brands are tomorrow’s “mega-brands.”
They offer guidance and mentoring to brands they see as having enormous potential. They simply cannot accommodate every new brand that pops up on the scene, but they do their best to put processes in place to evaluate and “vet” new brands entering the already crowded supplier landscape.
One way this takes shape is the development of new selling divisions created specifically for small, emerging brands.
Another service many distributors provide is an online portal where new brands can apply online (submit their proposals for consideration).
Different distributors offer support and services for new brands looking to enter their market. These online application processes make it easier for new brands to get started.
10) Improving Efficiency and Streamlining the Supply Chain
Tremendous investments have been made in platforms, infrastructure, and systems to automate and streamline the supply chain. All tiers benefit from these high-tech tools, but too few suppliers know they exist.
Given the ongoing supply chain disruptions in bottling, importing, warehousing, and shipping, distributors’ efforts to improve these systems should be celebrated.
Some of these new systems include:
- Partnerships with transportation companies
- Planning and procurement software
- Improved analytics tools enable better forecasting
- More transparency in communication between tiers
- Warehouse visibility
Because alcohol must adhere to strict compliance policies, the distributor tier is uniquely positioned to assist its supplier partners with these potential disruptions in the supply chain.
11) Data Collaboration
The wine and spirits industry increasingly uses big data from various sources to make more informed decisions.
America’s wholesalers are sitting on mounds of data, and most are beginning to make this data more actionable for their supplier partners.
Suppliers can better understand and leverage their distributors’ data by leveraging integrated software solutions like BevPath.
The current technology exists to bring your entire distribution team to the table!
12) Brand Promotion Assistance
Today, distributor capabilities regarding email marketing, social media, and graphic design are more sophisticated than ever. But, it’s surprising how few supplier partners avail themselves of these high-tech services.
These services are provided by small and large distributors alike. Most boast a state-of-the-art graphic design department and experienced merchandising professionals who help their suppliers create custom marketing campaigns and materials that help their brands stand out in a crowded marketplace.
But despite this widespread support from distributors of all sizes, stories abound about distributors dragging their suppliers, kicking and screaming, to utilize their tools and resources like:
- Wine and cocktail menu printing
- Market-specific point-of-sale materials
- Access to and involvement in high-exposure events like rodeos, wine festivals, auctions, and trade shows.
Giving Credit Where Credit Is Due
There are certainly more than twelve ways distributors can and do support their supplier partners! It often goes unnoticed because so much of it occurs behind the scenes.
Andavi Solutions is fortunate to have clients operating in multiple tiers of the industry, and we are eager to continue enabling the players in those tiers to work together ever more effectively.